Tribunal has power to grant stay even beyond 365 days

Brief of the case

In the case of Pespsi Foods Pvt Ltd vs. Assistant Commissioner of income Tax, (Delhi High Court) has held that third proviso to section 254 (2A) through the insertion of the expression – ‘even if the delay in disposing of the appeal is not attributable to the assessee’– by virtue of the Finance Act, 2008, violates the non-discrimination clause of Article 14 of the Constitution of India. Hence, the said expression is unconstitutional and violate Article 14 of constitution of India is therefore struck down. Thus, Tribunal can grant stay of demand even after the period of 365 days.

 Facts of the case

The appellant were initially granted stay by the Income Tax Appellate Tribunal. But, the period of 365 days from the grant of initial stay has elapsed and in view of the provisions of Section 254(2A), as it stands now, the Tribunal cannot grant any further extension of the stay even though the appeals filed by the petitioners before the Tribunal are pending even though the delay in the disposal of the appeals is also not on account of any conduct attributable to the petitioners.

The appellant file Writ petition in High court challenging the validity of the amendment made in section 254 (2A) by Finance Act, 2008 as be violation of Article 14 of the constitution of India.

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